Federal Reserve Updates and Expands the Scope of the Main Street Business Lending Program
On April 30, 2020, the Federal Reserve updated the terms for its forthcoming Main Street Lending Program. As previously stated, the Main Street Lending Program will make up to $600 billion in new financing in the form of four-year term loans available to eligible small- and mid-sized businesses. The Treasury Department, using funds appropriated to the Exchange Stabilization Fund under the CARES Act, will make a $75 billion equity investment to backstop the Main Street Lending Program.
As updated, the Main Street Lending Program will include three facilities: (i) the Main Street New Loan Facility (“New Main Street Facility”), under which the Federal Reserve Bank of Boston (“Reserve Bank”) will purchase, through a special purpose vehicle (“SPV”), 95% participations in new loans made by eligible lenders to eligible borrowers, (ii) the Main Street Expanded Loan Facility (“Expanded Main Street Facility”), under which the Reserve Bank will purchase 95% participations in upsized tranches of certain existing loans made by eligible lenders, and (iii) a newly announced Main Street Priority Loan Facility (“Priority Main Street Facility”), under which the Reserve Bank will purchase, through an SPV, 85% participations in new loans made by eligible lenders to eligible borrowers.